Budget Impact Felt Long Term

“I am very concerned for my children,” the man held his three year old daughter close. “I just found out we are having another baby. I should be happy. But I’m not. I’m worried.”

He was concerned about what the state’s two year budget would do to our local schools.

Across western Wisconsin decisions are being made to cut programs, teachers and support staff.

The budget makes historic and drastic cuts not only to local schools but to job training, universities and local government.

These changes may not be immediately obvious. But the budget ties the hands of local officials forcing them to cut services people need and leading to layoffs, closed programs and big changes in our schools.

The long term impact of these decisions is very hard to understand. But this translates to immediate details - teachers in Black River Falls, Tomah, and Alma Center no longer with jobs. Agriculture education in heart of the dairy land is downsized or disappearing.

I fear people may not realize the impact on our local communities. It’s difficult to connect the loss of a student’s opportunity in Alma with a decision made in Madison. It’s hard to understand why help that used to be available at a nonprofit has now gone away because the organization depended on funds from the county. The money going to the community agency may not be there.

We are told this hurt must happen.

The story goes, “The state is broke. We had a $3 billion deficit. We had to make tough decisions. We had to cut education, universities, technical colleges, local governments, services to the disabled and seniors. We had no choice. We had to put the state back on a sound financial basis.”

But the numbers don’t jive with the rhetoric.

Jobs are coming back. State revenue is on the upswing. We started the year with one and a half billion dollars in new estimated revenue; in May economists added more than half a billion in additional estimated revenue. That brings Wisconsin to over two billion over the last budget.

So with all the new money, why all the turmoil this year?  Why the draconian measures? Why the rollback of longtime Wisconsin traditions? Why the attacks on teachers and public employees this year when two years ago we fixed a much larger deficit, balanced the budget and met our responsibilities without the heated rhetoric and without tearing the fabric of our communities?

The answer lies in the choices made by our Governor and Republican majorities in the State Senate and Assembly. The numbers in the budget just signed into law tell the story.

This budget spends quite a bit more than the last 1 . Programs the Governor and Republican leaders don’t like - I don’t know any other way to say it - public education, universities, technical colleges, local governments, - are cut $1.23 billion 2 . Programs the Governor and Republican leaders like are increased over $ 1.6 billion 3 .

In addition, leaders are buying over two hundred 4 million in new tax credits this budget, which adds up to over two billion in tax breaks over the next ten years.

We hear the state is in better fiscal shape than decades. This is simply not true.

The budget does not pay bills coming due. The budget restructures hundreds of millions of dollars in debt, not to gain a lower interest rate, but to completely avoid the payments. 

Postponed debt 5 will cost the state nearly ninety million in interest over the next 20 years.

The budget moves large amounts of money from one fund to another. The bulk of this money comes out of the state’s general checkbook leaving less for schools and local government. 6

One place the money ends up is to pay for roads 7 . Road construction projects continue for many years. But commitments to construction have been made without regard to the next budget. This leaves Transportation in the next budget with a hole of over nine hundred million dollars 8 .

Now more than ever, wise citizens must beware of rhetoric. One thing every political candidate learns in candidate training school is how to craft a message and spin a story.

My advice to those weary of the spin? Look at the deeds. Look at the results. Look at the numbers. Follow the money. Don’t be distracted by words.



1 Comparing General Fund spending in 2011-13 to General Fund spending 2009-11 $1.3 billion more is spent in this budget year. This budget spends $888 million more federal dollars and $2.4 billion more in all dollars. Governor Walker’s budget bonds $1.8 billion less than Governor Doyle’s budget. See comparison of the two budgets: http://legis.wisconsin.gov/senate/sen31/news/Issues/2011-12-Budget/Comparison_of_09-11__11-13_appropriations__revenue%20061311.pdf

2 These cuts include $792.2 million to General School Aid & Categorical School Aid; $250 million to University of Wisconsin; $71.6 million to technical colleges; $43 million to the Higher Ed Aid Board; $76.75 million to Shared Revenue; $37.5 million to General Transportation Aid.

3 Spending increases include $1.387 billion to Department of Health; $161.8 million to the Wisconsin Economic Development Corporation and $66.6 million in new transportation spending. This is a partial list.

4 This budget makes substantial long term commitments in new spending. The January Special Session bills including HSAs (Act 1), Relocating Business Credits (Act 3), Deductions for New Hires (Act 5) and the Economic Development Zone Increases (Act 4) will cost Wisconsin $117.2 million in this budget, $130.3 million in the next budget and $638.4 million over the next ten years. The tax decreases in this budget will cost $93.4 million. The total tax changes over the next ten years will cost the state $2.334 billion in foregone revenue. Source: Rob Reinhardt, General Fund Taxes. Legislative Fiscal Bureau Memo to Senator Miller. June 9, 2011. p.2. http://legis.wisconsin.gov/senate/sen31/news/Issues/2011-12-Budget/6%209%2011%20Miller.pdf

5 Jon Dyck to Senate Democratic Caucus Members. Structural Condition of the Transportation Fund under the Joint Committee on Finance Substitute Amendment to the 2011-13 Biennial Budget Bill. Legislative Fiscal Bureau. June 15, 2011. http://legis.wisconsin.gov/senate/sen31/news/Issues/2011-12-Budget/061511%20LFB%20Dyke%20Structural%20Condition%20of%20Transportation%20Fund.pdf

6 Bob Lang, Legislative Fiscal Bureau Memo to Senator Lena Taylor. Use of Certain Funds within the Joint Committee on Finance’s 2011-13 Budget Recommendations. June 14, 2011. http://legis.wisconsin.gov/senate/sen31/news/Issues/2011-12-Budget/2011_06_13WILeg_State%20Tax%20and%20Fee%20Modifications.pdf

7 The one time transfer is of General Fund tax dollars to the Transportation Fund of $102.5 million and from the Petroleum Inspection Fund ($19.5 million) to the Transportation Fund. Source: Jon Dyck memo to Senate Democratic Caucus Members (above) http://legis.wisconsin.gov/senate/sen31/news/Issues/2011-12-Budget/061511%20LFB%20Dyke%20Structural%20Condition%20of%20Transportation%20Fund.pdf

8 The Legislative Fiscal Bureau reports the one-time transfers will leave the Transportation Fund with a deficit of $122 in each year of the 2013-15 biennium. In addition, debt service needs have not been met and bonding needs are not met for committed road projects. Debt incurred but not budgeted for - the combined effect of one time transfers, debt service due (but not budgeted) and bonding delayed is $929 million in 2013-15 budget ($455 million in 2013-14 and $474 million in 2014-15). Source: Jon Dyck memo to Senate Democratic Caucus Members. Structural Condition of the Transportation Fund under the Joint Committee on Finance Substitute Amendment to the 2011-13 Biennial Budget Bill. Legislative Fiscal Bureau. June 15, 2011. p. 2. http://legis.wisconsin.gov/senate/sen31/news/Issues/2011-12-Budget/061511%20LFB%20Dyke%20Structural%20Condition%20of%20Transportation%20Fund.pdf